Provinces need to nix immigrant-investor visas

Nothing really new here in Alan Freeman’s commentary but well stated:

It’s time Canadian provinces stopped selling visas to the highest bidder.

They’re known as immigrant-investor visas, which promise wealthy migrants permanent residence and a path to Canadian citizenship in return for actively investing in a Canadian business or lending money to a provincial government. 

But in reality, these visa programs are simply fancy schemes to sell Canadian passports to wealthy businesspeople, mainly from mainland China, who want a bolt-hole for their family and often have little intention of ever settling in Canada, aside from buying a pricey condo in Vancouver or Toronto and leaving it empty. 

What’s worse, these schemes are an invitation to the unscrupulous to use Canada as a place to launder money, and encourage a slimy network of immigration counsellors, questionable lawyers and investment advisers to collect big fees from would-be migrants.

The fact that Canadian provinces — Quebec, in particular — have been actively courting this trade is an embarrassment and a massive failure of public policy, with shades of corruption thrown in.

The federal government wisely got out of the immigrant-investor visa business in 2014 but several provinces, through the so-called provincial nominee programs, kept them going. Prince Edward Island is a case in point.

Earlier this month, P.E.I. decided to shut down the entrepreneur stream of its provincial nominee program after a new scandal engulfed it, 10 years after a similar program in the province was shut down in the wake of irregularities.

Canada Border Services Agency recently charged two hoteliers in Charlottetown under the Immigration Act with providing fake addresses to 566 new immigrants to the province between 2008 and 2015 who declared the Sherwood Motel as their principal residence. Must have been pretty crowded. 

Under the P.E.I. scheme, would-be immigrants had to make a $200,000 provincial deposit to the province, refundable if they set up a business there, chump change for these would-be Canadians. Last November, the government said that two-thirds of participants had forfeited their deposits because they hadn’t followed through and set up businesses in the province.

It was clear to anybody who was looking that these so-called immigrant investors never intended to set up a souvenir shop or convenience store in Charlottetown or Summerside. They simply wanted a back-door route into Canada so they could set themselves or their children up in Markham or Richmond. P.E.I. officials and politicians, in their desperation to attract immigrants, have been shown to be rubes of the first order.

The Quebec Immigrant Investor Program is bigger and the abuse has been even more flagrant, as demonstrated in a fabulous investigative report this month by the Radio-Canada TV show, Enquête.

The program documents the underbelly of the Quebec program as a conduit for wealthy Chinese businesspeople to buy permanent residency in Canada by stating their intention to settle in Quebec, and seldom even setting foot there. An estimated 85 per cent of the thousands of investors who have passed through the program since 1986 have gone to Ontario and B.C.

In its report, Enquête created Mr. Chen, a would-be investor in Quebec from mainland China and secretly filmed him as he made the rounds of immigration lawyers and consultants in Hong Kong who specialize in the Quebec program. It’s an eye-opener.

When Mr. Chen tells these advisers that he doesn’t intend to live in Quebec, even though it’s a pre-condition of the program, he’s told it’s not a problem. One lawyer suggests he rent an apartment for three months in Montreal to prove he has a Quebec address and leave it vacant. And if that’s too expensive, the lawyer suggests giving the Montreal address of his law firm as the immigrant’s residence.

When Mr. Chen admits the source of his assets isn’t squeaky-clean and he actually runs a pawn shop and money-lending business on the side, one adviser suggests he hide his problem assets in the British Virgin Islands or even procure a second identity by buying a passport in one of the Caribbean islands that will sell one to anybody with cash. “You may be Mr. Chen, but you can change your name to Bruce Lee,” says the paralegal, who identifies herself as a lawyer.

If experience in other jurisdictions is any indicator, these programs are toxic, attract the wrong type of people and seldom reach their economic goals. 

South of the border, U.S. Citizenship and Immigration Services recently shut down the EB-5 immigrant-investor program in Vermont after the failure of state officials to stop promoters of the Jay Peak ski resort from misusing US$200 million in immigrant-investor money that flowed into a series of questionable projects. 

In Australia, the Productivity Commission, an independent federal advisory agency, recommended in 2016 that its “significant investor visa” program be scrapped after Austrac, the agency that tracks money laundering, said there were “difficulties in identifying the sources of funds and wealth for customers on significant investment visas, as this wealth is often acquired in foreign jurisdictions.” The Commission said there were minimal benefits from the program and “any benefits accrue mainly to those visa holders and fund managers.”

Australia has since significantly boosted the minimum investment required — to $5 million — and tightened oversight of the program. The result is that there are a lot fewer takers. Why bother with Australia if you can get to Canada through the Quebec scheme, which only requires participants to lend $1.2 million for five years to the Quebec government, interest-free?

While it’s true that the Atlantic provinces and Quebec have major problems attracting and retaining immigrants, it’s an illusion to think that the way to improve these numbers is by selling visas to wealthy migrants. In fact, these are the last people who want to settle in Corner Brook or Drummondville.

The major advantage of these places is the fact that they’re actually not as wealthy as Canada’s big cities, that housing is affordable, and they’re actually easier places to start a new life in Canada. Manitoba has shown that it’s possible to attract hard-working immigrants from places like the Philippines who will make real contributions to society rather than use Canada as a place to stash ill-gotten gains. 

Canada is one of the most attractive places in the world for immigrants to settle. Selling visas and passports is humiliating and counter-productive.

Source: Provinces need to nix immigrant-investor visas

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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