P.E.I.’s PNP program leading to double standard for Canadian immigration, says lawyer

Business immigrant programs are always ripe for abuse and limited returns:

From her Charlottetown fitness studio, Wendy Chappell has watched a parade of new, immigrant-owned businesses open in nearby storefronts.

She was excited to have newcomers open up shop around her, but watched in disappointment as their companies — including a Chinese children’s book store, a porcelain shop, a store that sold reproductions of art and a baked goods store — closed over the last two-and-a-half years.

She started wondering about the province’s business immigration system — and whether it really retains immigrants or creates lasting jobs.

“How do we have a system that encourages this? Where’s the oversight to our provincial [immigration] nominee program?” she asked, standing at her second-floor window overlooking University Avenue, near the city’s downtown.

“From my window, I could see four storefronts which began to be these turnover businesses, which were legitimate businesses, but weren’t conducting much business.”

‘Wealthy applicants will work the system’

Locally, such businesses set up under the “100 per cent ownership stream” in the provincial nominee program are known simply as “PNP companies.”

It’s a system the provincial Liberal government says is diversifying the Island’s population and economy, but its critics say has evolved into a side-door route to larger Canadian cities, while filling the province’s coffers with forfeited deposits from failed or abandoned ventures.

“In the absence of a sound and rational immigration program with proper oversight … wealthy applicants will work the system,” veteran Halifax-based immigration lawyer Lee Cohen wrote in an email to The Canadian Press.

 In P.E.I.’s program, foreign business people provide the province with a $200,000 deposit, commit to invest $150,000 and actively manage a firm that incurs at least $75,000 in operating costs.

After the deal is signed, the province nominates the firm to the federal Immigration Department as a permanent resident. After an agreed period of time, usually a year, the immigrants can claim a refund of $150,000 if they met the business requirements, and $50,000 more if they could prove to the province they stayed in the province.

For Chappell, the results aren’t evident.

‘We think Ontario is the better choice’

Just beneath her studio, the Elite Gourmet Bakery closed up earlier this month. Chappell said during her occasional visits over the past year she’d seen a rack of baked goods purchased from a local shop, as hired students sat working on their laptops or reading books.

The Canadian Press visited the owner’s address listed on the province’s business registry, but a former landlord said he had moved.

Jun Jia, the co-owner of the children’s book store that used to operate across from Chappell, confirmed in an email that he has closed his commercial space.

“We have left Prince Edward Island and moved to Ottawa … We just want to give my sons better education, and we think Ontario is the better choice,” he wrote.

Judy Chen, the owner of Grace Home Decor, a shop that also used to operate near Chappell’s studio, said in a telephone interview from Ottawa that she was now travelling around Canada and might be back in “about a month.”

The provincial nominee program is a “win-win situation,” she wrote in an email.

“We like to be involved in the local community. It’s not a bad idea. We would like to try. We opened a business. We hired a lawyer, an accountant, local people,” she said in an interview.

Meanwhile, figures that emerged recently from the province’s public accounts showed many PNP businesses simply never open at all.

The Island Investment Development Inc., which holds the deposits for the newcomers’ businesses, indicates $18 million in net revenues over the past year came from immigrant companies that defaulted on their obligation to create a business.

The figure is equivalent to about half the province’s projected new spending on infrastructure projects.

177 defaulted on business component

Two thirds of the 2016-17 applicants, 177 people, defaulted on the business component of their agreement, while 92 did succeed in receiving the $150,000 business portion of their deposits back, according to the province.

However, of those, the province said 30 closed after one year. Of the 177 who defaulted, 152 never opened, and 25 defaulted after opening.

Yet, the provincial minister responsible said almost all the nominees are passing residency requirements, allowing them to keep $50,000 of their deposit, and, he said, the immigrants are staying in the province.

Heath MacDonald, the provincial minister of economic development, said during an interview at his office he’s not contemplating changing the deposit system.

“One number that really stands out to us is our residency number. Even though they [nominees] may default on their business application and obligation, they are staying here,” he said during an interview in his Charlottetown office.

via P.E.I.’s PNP program leading to double standard for Canadian immigration, says lawyer | CBC News