Despite “increasing pressure from external stakeholders,” the Canadian government “has no plans” to expand the availability of immigrant investor programs that require only passive investment.
That’s the conclusion of a newly declassified 2021 memorandum to the Canadian minister of Immigration, Refugees and Citizenship. The document was classified secret and has only recently been released under access to information laws, albeit with significant redactions.
These programs, whose participants are often derided as “buying passports,” allow would-be immigrants to skip the line with a sizable investment in their new country. But, the document notes, they tend to have low success rates and suffer from significant associated problems.
“The department is not generally supportive of passive investor pathways,” reads the memorandum, “given the challenges associated with these programs and the lack of long-term economic benefits… IRCC [Immigration, Refugees and Citizenship Canada] will continue to assert that passive investor programs have not proved successful and has no plans to put in place others at the federal or provincial levels.”
Despite being heavily censored, the memo provides a unique insight into policy priorities in the nation’s capital. The government’s reluctance is in line with a general global trend that has seen passive investor programs fall out of favour — although hybrid versions (that include a private equity dimension) are on the rise, as seen with the EB-5 program in the United States and the Golden Resident Visa Program in Portugal (however that program is slated to lapse in the coming year).
As the document notes, Quebec is the only jurisdiction in Canada that maintains a passive investor pathway to citizenship. The program allows investors to obtain Canadian permanent residence with a $1.2 million investment into a prescribed (government guaranteed) investment.
Such programs are explicitly prohibited by federal Immigration and Refugee Protection Regulations, but under the terms of the Canada-Quebec Accord the province maintains sole responsibility for the selection of economic immigrants destined to Quebec and can establish its own parameters for economic programs, including the investor pathway.
According to the document, the Quebec government has identified three key concerns related to its passive investor program: Low retention rates (only 16 per cent among investors selected between 2008-2017), lack of French language ability (only 5 per cent of applicants were French or had “requisite levels of French”) and concerns about “program integrity.”
Concerns about the Quebec program surface periodically in the media, the document adds, including “complaints regarding the trend of permanent residents selected through this program settling in provinces other than Quebec.”
These concerns appear to echo those held by the federal government, which cancelled the similar Federal Investor Immigration Program in 2014. The document notes that passive investor programs produce “poor long-term economic outcomes” and have led to “program integrity issues” and a “public perception of ‘buying passports.’”
The memorandum notes there is “limited evidence” of successful passive investment programs globally, and the department has chosen to focus instead on “initiatives that attract global talent and foster innovation.”
There is clearly no appetite in Canada’s halls of power to reinstitute any form of a passive investor program, despite persistent lobbying from stakeholders.
