By Majorie van Leijen May 13 2014 https://www.zawya.com
Photo Credit:REUTERS/David McNew
New investment programme in Canada in the making
In February this year, the two investment programmes that existed were scrapped by the Canadian government, along with the backlog of thousands of applications. What had been the gateway to Canadian citizenship for the high net-worth-individuals for many years was suddenly a closed door.
However, it seems that the door will not remain shut, as several options have already been discussed. Most concrete were recent statements made by Chris Alexander, Minister of Immigration and Citizenship, to the Chinese media about the details of a new investment pilot scheme, which is set to be launched by the year-end.
According to news sources, the new programme would take the shape of a venture capital pilot, with a minimum investment amount that is more than twice as much as the previous amount, which was CAD800,000.
The investment would involve a privately managed at-risk venture capitalist investment, with a strong focus on start-up businesses, whereas the original programme offered a risk-free investment; the funds were eventually returned in full, interest free. The financing option that existed would no longer be part of the new pilot.
Further, the period of investment would probably exceed the previous investment period, which was a five-year period. However, language and residency requirements would most likely not be terribly stringent.
When the Immigrant Investment Programme (FIIP) and the Entrepreneur Programme were cancelled three months ago, the Citizenship and Immigration Canada (CIC) explained that in order to move forward with programmes that would more accurately capture the types of investors needed in Canada, CIC would instead eliminate the files currently in the backlog.
With that decision, 65,000 backlogged applications were returned. “By doing away with the current IIP and EN programmes, the government will pave the way for new pilot programmes that will actually meet Canada’s labour market and economic needs,” was the argument of the CIC.
However, not much was revealed about these programmes after that, claimed Sergio Marchi, former Minister of Citizenship & Immigration and Member of the global Council on Migration at the sidelines of the Citizenship by Investment & International Residence Summit, held in Dubai last month.
“Rather than refocusing and reinvigorating the programme, it was terminated without providing the public with a transparent economic analysis of the costs and benefits it brought to Canada,” he said.
Over the last 25 years, some 3,000 high net-worth-individuals have become residents annually, representing over CAD10 billion of investments, he points out. “These investments have been used to fund Canadian priorities, including support for SMEs and debt reduction.”
In general, the focus of the Canadian immigration policy has been more on the worker than on the investor. On average, immigrant investors comprised between 2-3 per cent of all immigrants who come into Canada each year, and a total of 130,000 investors have arrived in Canada over the past 25 years.
Ironically, the country was among the first to adopt an immigrant investment programmes, a concept which has been applied in many countries ever since. However, there is currently only the Start-Up Programme, which is an option for the entrepreneur to do business in Canada in return for permanent residency.
© Emirates 24|7 2014