Canada�s decade-long run of surpluses has recently vaporized into a $55 Million budget deficit. The Harper government now faces the prospect of a motion of no-confidence which could lead Canadians into a second election in a year - its fourth since 2004. Finance minister Jim Flaherty should confer with an unlikely ally � Immigration Minister Jason Kenny to improve the government�s finances. He has the power to bring upwards of $400 Million of new income each year into federal coffers from the immigrant investor program. This could help pay for of the interest charges on the current budget deficit. Here is how.
Under the immigrant investor program Canada offers the most established and most widely used investment immigration programs in the world. With the stated intention of attracting business acumen and investment to Canada, the immigrant investor program offers permanent residence to qualified business applicants and their immediate families who commit $400,000 into government guaranteed investments for five years which pay no interest.
However, the immigrant investor program operates under an oligopoly in Canada between the federal program and the more popular Quebec program. Quebec promotes its own $400,000 immigrant investor program under the authority of the Canada-Quebec Accord, 1991 and the Immigration and Refugee Protection Act, 2002.
The Quebec program is far more popular than the federal program because Quebec processes applications much faster (6-9 months) and brokers are able to pay 12.5% commission fees immediately following Quebec approval, which often takes place long before the investor completes mandatory health and security requirements and actually comes to Canada.
Of the approximately 2500 immigrant investor applicants admitted to Canada each year, 70% are destined to Quebec. Yet statistics show that only about 30% of investor immigrants destined to Quebec actually settle there, as immigrants avail themselves of their Charter based mobility rights to settle elsewhere in Canada. Quebec benefits where it counts the most and this translates into a substantial financial loss for the Federal government.
Last year, the Harper government passed a controversial immigration bill that now provides the federal immigration minister with unprecedented flexible ministerial powers allowing him to unilaterally decide who gets into Canada and when. Under current law, Immigration Minister Jason Kenney could issue instructions to visa offices to fast track immigrant investor applications. Processing missions in source countries which produce the bulk of Canada�s immigrant investor applications (China, Taiwan, Korea, Pakistan, Syria, United Kingdom and United States) could be staffed with personnel who are knowledgeable in assessing documentation to support investors� applications. This would enable faster processing times.
Additionally, modifications to current legislation could adopt a more liberal definition of investor�s management experience and provide for investments to occur following a selection decision rather than at visa issuance, in line with the Quebec program.
The benefit to the Canadian economy would be immediate and substantial. The bulk of Canada�s immigrant investors who state an intention to reside in Quebec but do not actually settle there would be more inclined to participate in the federal program. Quebec would receive its true share of investors who actually intend to settle in that province which translates into 30% of a $1Billion market (and growing) and the federal government would become the dominant player reaping a net gain of some $400 Million each year from current levels. As Canada tries to chart its course out of a recession, a financial gain of this magnitude from within existing federal programs, must be pursued with vigour.
