Following a 26-year run, Canada’s Immigrant Investor Program (IIP) was terminated in 2014. What was this program’s purpose, and what kinds of opportunities did it offer? While Canada decided to leave its IIP behind, were there any provincial survivors? This article will take a quick look back on one of Canada’s more controversial immigration programs.
What was the Immigrant Investor Program?
In 1986, the federal government launched the IIP to attract experienced business people to Canada with the goal of enriching the country’s economy. Investors that qualified for the program, along with their families, were granted immediate and unconditional permanent resident visas and would eventually be eligible for citizenship.
The IIP was an easy, breezy path to becoming a Canadian for those who could meet the eligibility criteria – which, in this case, largely came down to dollars and cents. To qualify, foreign nationals were required to have a net worth of $800,000 and be willing to provide the Canadian government with a $400,000 loan (interest-free on a five-year term). The interest earned on the loan would then be redistributed among the provinces to fund economic growth through various initiatives.
// While those numbers might not sound exorbitant by today’s standards, bear in mind that this program launched in the mid-80’s.
While those numbers might not sound exorbitant by today’s standards, bear in mind that this program launched in the mid-80’s. In 2020 dollars, those values are equivalent to a net worth of nearly $1.7 million (CAD), and a loan of just under $840,000.
While this program attracted investors from all over the world, it was especially popular among immigrants from China and Hong Kong, who largely chose to settle in Canada’s western provinces.
The Cancellation of Canada’s IIP
Before its eventual demise, the terms of the IIP were revised in 2010. The federal government noted that the program’s net worth and investment criteria had not been updated since 1999, and the sums required by Canada were significantly lower than comparable programs in other countries. This amendment raised the minimum required net worth from $800,000 to $1.6 million, and the minimum investment from $400,000 to $800,000.
“Under the old IIP, the volume of applications grew exponentially in recent years,” says the now-archived government webpage. “As a result, the Department temporarily stopped accepting new applications […] to prevent a flood of applications before the new criteria took effect.”
Though it was clearly a very popular path to immigration in its heyday, the IIP received a fair amount of flak: many denounced it as a shortcut for wealthy foreign nationals to “purchase” their Canadian citizenship, a privilege unavailable to the grand majority of potential immigrants.
Ultimately, the federal government put a moratorium on the program in 2012 and finally axed it in 2014. The official reasoning behind the cancellation was that IPP investors were not maintaining sufficient ties to Canada, and they ended up paying significantly less taxes than other economic immigrants in the long term. The government also said the program produced limited economic benefit for Canada.
The Exception: Quebec’s Immigrant Investor Program
Quebec often marches to the beat of its own drum compared to the rest of Canada, and its stance on the IIP is no exception. It is currently the only province to offer an investor program for foreign nationals, called the QIIP. However, at the time of this writing, applications have been suspended until April 2021.
The Canada-Quebec Accord, which gives Quebec significant freedom when it comes to selecting who can immigrate to the province, is what allowed them to keep the program alive.
However, one major concern has been raised with regards to this situation: would IIP immigrants simply use Quebec as a gateway to the rest of Canada? Data reported by Global News in 2018 revealed that since the IIP program began, 85% of immigrant investors who entered Canada through Quebec ended up in Ontario or British Columbia. Just 10% remained in Quebec. This has given rise to concerns on the retention of IIP applicants in Quebec, which needs to be increased.
Now that it is suspended until spring, it’s too soon to tell what will happen with the QIIP. Will it get the axe like its Canadian counterpart? Will it continue to set Quebec apart from the rest of the country? We’ll have to wait and see.
