ARCHIVED – Backgrounders - New federal Immigrant Investor Program will bring to Canada more resources to fund economic development and job creation initiatives
Canada’s Immigrant Investor Program (IIP) attracts experienced businesspeople who bring significant economic benefits to Canada. In order to keep pace with the changing global economy and keep Canada’s program competitive, Citizenship and Immigration Canada (CIC) has changed the program so that it makes an even greater contribution to the Canadian economy. The changes were prepublished in the Canada Gazette on June 26, 2010, for a thirty-day public comment period and will take effect December 1, 2010.
Benefits of the IIP
Investments made through the program take the form of a five-year, zero interest loan to the Government of Canada on behalf of participating provinces and territories. These funds are distributed to participating provinces and territories to fund economic development and job creation initiatives in their regions. While investment strategies vary, some examples to date include venture capital investments in clean technology, public sector infrastructure investments (e.g., expansion of broadband Internet access, and construction of post-secondary institutions), and loans to small and medium-sized Canadian businesses. The provinces and territories must guarantee repayment of the investments received.
The provinces and territories are currently managing almost $2 billion of five-year, revolving IIP capital. In 2009 alone, almost $500 million was allocated through the program. British Columbia, Manitoba, Ontario, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, New Brunswick, Saskatchewan and the Northwest Territories participate in the program. Other provinces and territories have expressed interest in joining as well.
Research has shown that the IIP has a positive impact on Canada’s economy. While the program is an important source of investment capital that can be used by provinces and territories, immigrant investors also make significant economic contributions by bringing to Canada business acumen, important links to global economies and an understanding of international markets.
Changes to the Program
The Government of Canada has established new eligibility criteria for the IIP. These regulatory changes now require new investors to have a personal net worth of $1.6 million, up from $800,000, and make an investment of $800,000, up from $400,000.
Higher investment amounts mean that provinces and territories will receive a greater amount of capital to put toward economic development within their regions. Higher personal net worth criteria mean that the program is now better positioned to attract investors with valuable global business links and the resources to make secondary investments into the Canadian economy.
How Canada’s Program Compares to Other Countries
Canada’s old IIP criteria had not changed since 1999 and were the lowest when compared to other countries with similar programs (see the chart below: International Immigrant Investor Programs). The new criteria now align Canada’s program more closely with other immigrant-receiving countries, while still offering investors the competitive advantages of up-front permanent resident status and guaranteed repayment of their investment.
International Immigrant Investor Programs
|Minimum Net Worth||Minimum Investment|
(CAD$719,175 regional program)
(CAD$515,850 regional program)
NOTE: Currency equivalents based on Bank of Canada nominal exchange rates, January 11, 2010.
* Under the Canada-Quebec Accord, Quebec is responsible for the selection of immigrants destined to the province, as well as the design and delivery of its own settlement services. The regulatory changes to the eligibility criteria also apply to Quebec-selected investors.
Managing Application Intake
Under the old IIP, the volume of applications grew exponentially in recent years. This surge in applications resulted in a rising inventory and longer processing times. As a result, the Department temporarily stopped accepting new applications when the changes were first proposed for public comment on June 26, 2010. These measures were put in place to prevent a flood of applications before the new criteria took effect, which would have stretched processing times even further. Once the new criteria take effect December 1, new applications will be processed alongside the old ones. In this way, Canada can begin to benefit from the changes as soon as possible.
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