Canada’s immigration minister John McCallum recently announced that the federal government is evaluating the merits of launching a new program to attract immigrant investors to the country.1
Entrepreneur and investor (“business”) immigration programs aim to stimulate economic growth by attracting investment capital, business savvy, and high-net-worth individuals (HNWI) to Canada.
On the one hand, these programs draw talent, investment capital, and spending power to Canada. Yet they have had only mixed success since Canada began to open its doors to business immigrants in 1978. In addition, the impact of such programs on housing affordability, the “sale” of Canadian citizenship, and the extent to which the programs benefit Canada’s economy and society have provoked public concerns.
These concerns raise a billion dollar question: Does Canada need dedicated business immigration programs? According to most Canadian governments, the answer appears to be yes. Today, such programs exist both federally and in 8 of 13 provinces and territories.
Measuring the Economic and Social Value
To what extent have business immigration programs benefitted Canada’s economy? The answer depends on one’s benchmark for success.
If the primary objective is to draw investment capital and spending to Canada, then the federal government’s Immigrant Investor Program (IIP), which was terminated in 2014, and the Quebec Immigrant Investor Program, which continues to operate, have been successful. Between 2007 and 2011, the two programs raised $6.42 billion in investment capital for the governments of Canada and Quebec.2 A 2010 study argued that the main economic benefit of the IIP was the purchasing power of immigrants, who spent significantly on homes, education, and goods and services in Canada.3
However, if the main aim is to attract individuals and investment capital that will lead to business and job creation, then much work lies ahead. Today, most of Canada’s programs set out to achieve this goal. To that end, Canada overhauled its business immigration programs in 2014, as government research found that business immigrants had only limited economic success in Canada, both in terms of their earnings and in running successful businesses.
The social value of the programs also merits examination. Canada seeks immigrants who will socially and culturally integrate into local communities and become engaged citizens. As such, Canada’s business immigration programs contain residency provisions which require foreign nationals to spend a certain length of time in the country to either qualify for or maintain their Canadian permanent resident status, or to become eligible for citizenship. This has created a persistent challenge, as residency requirements may conflict with the fact that entrepreneurs and investors are highly mobile and frequently travel around the world to tend to their business.
The Future of Business Immigration
Luckily, Canada’s extensive experience in this space provides stakeholders with lessons that can be applied when designing the business immigration programs of tomorrow. For these programs to meet Canada’s economic and social objectives, the following considerations must be taken into account.
Canada must be cognizant of the global competition. In the 1980s, Canada was an international pioneer in business immigration, competing with only a handful of countries. The field is much more crowded today, with about 30 countries offering such programs. Canada must continue to keep an eye on the competition in peer nations, and remain malleable enough to glean lessons learned and adopt global best practices at home.
Policy experimentation continues to feature prominently in the programs designed in Canada and elsewhere. Canadian policy-makers often adjust programs to try to create the right incentive structures and conditions for immigrants to facilitate business and job creation in Canada. Program monitoring, refining, and a bit of patience will help achieve Canada’s business immigration goals.
Determining appropriate business immigration intake levels to support economic growth, preventing fraud, limiting burdensome application requirements, and processing applications quickly all remain pivotal to success. At its termination in 2014, the IIP had a backlog of 65,000 applications that would have taken six years to process.4 It is essential to balance these important and challenging responsibilities if Canada wants to remain globally competitive and attract the best and the brightest.
Social issues such as housing affordability and residency requirements require additional scrutiny. Public opinion matters; for these programs to succeed, the Canadian public must be sold on their economic and social benefits to the country. Increasing public awareness of the social benefits, such as the fact that business immigrants are a significant source of charitable contributions, may help ease concerns.
While achieving the aforementioned tasks may appear daunting, Canada’s overall success with immigration should give stakeholders confidence that the country is fully capable of creating successful business immigration programs that benefit Canadians.
Help Shape the Future in December!
In December 2016, the Conference Board is hosting Canada’s first-ever Entrepreneur & Investor Immigration Summit in Toronto.
The two-day summit will convene domestic and international stakeholders from many sectors to discuss the economic and social implications of business immigration programs, and how Canada’s federal, provincial, and territorial programs can be improved.
Your recommendations at the summit will inform a major Conference Board National Immigration Centre report on this topic to be released in early 2017.
Make sure to sign up now!
Upcoming Conference Board Immigration Events: Toronto and Ottawa
This October, the Conference Board hosts Minister John McCallum at a major meeting in Toronto to discuss the future of Canada’s immigration system.
In May 2017, we are hosting our third annual Canadian Immigration Summit in Ottawa, a major two-day event that attracts participants from across the country.
Please contact us if you wish to get involved!