Canada Clamps Down on Investor Visas; Ottawa Ends Its Immigrant Investor Program Popular Among Wealthy Chinese
February 21, 2014 Leave a comment
Canada Clamps Down on Investor Visas
Ottawa Ends Its Immigrant Investor Program Popular Among Wealthy Chinese
JASON CHOW in Hong Kong and ALISTAIR MACDONALD in Toronto
Updated Feb. 12, 2014 8:28 p.m. ET
Canada’s cancellation of an immigration program popular with wealthy Chinese is adding to concerns that a country once welcoming of China’s investment and immigrants is now closing the door on both.
Canada this week scrapped the Immigrant Investor Program, which allowed individuals to effectively buy permanent residency. While the program isn’t targeting Chinese citizens and will be replaced by regulations that bring Canada more in line with what other countries are doing, the change is challenging the perception in China of Canada as one of the West’s most friendly jurisdictions.
In late 2012, Canada moved to prevent state-owned enterprises from buying up Canadian oil-sands assets, except in rare circumstances—a move some Canadian businesses and bankers say has put a chill on Chinese investment in Canadian assets.
Canada’s moves on immigration and foreign ownership could benefit other countries looking to attract money from the world’s second-largest economy.
On Wednesday, Immigration Minister Chris Alexander said it was “absolutely wrong” to suggest Chinese immigrants were any less favored in Canada and that the country had become less welcoming of investment from China.
“The facts proves otherwise, China will have been the top source country [for immigrants] in 2013,” he said in an interview.
The canceled visa program granted permanent residency to those who committed 800,000 Canadian dollars (US$726,700) to a five-year zero-interest loan to one of the country’s provinces, and was particularly popular with Chinese citizens. The government said it would replace the program with a new Immigrant Investor Venture Capital Fund, which will require immigrants to invest money, rather than just loan it.
But the new program hasn’t assuaged concerns among emigrant hopefuls. Larry Wang, the chairman of a Beijing-based immigration consultancy firm, said he has been dealing with a stream of worried clients since the change was announced Tuesday in Canada. “They can’t believe it,” he said. “The clients are getting the message: Canada doesn’t want them. They now will have to look for other opportunities,” he said.
Canada lets in more new immigrants per capita than any of the Group of Seven advanced economies, and has ranked as a top choice for Chinese investor-immigrants because of its relaxed immigration policies and generous publicly funded health and education systems. While Chinese immigration has tailed off since its peak in 2005, it still made up around 11.5% of all immigrants to Canada in 2011, according to the government.
The vocal community of lawyers and real-estate agents whose clients used Canada’s investor immigration program said other countries that have rapidly rolled out their own plans would benefit from Canada’s move to change its policies.
Jean-François Harvey, an immigration lawyer based in Hong Kong, had 4,000 clients waiting for approval for the Immigrant Investor Program, with some waiting for over five years. He said three-quarters have sought residency in other countries, including the U.K. and U.S.
“I tell my clients, ‘Let’s go to a country where you’ll be welcome because Canada is not friendly right now,’ ” he said.
Australia unveiled a visa program in 2012 to allow immigrants a residency visa if they invested five million Australian dollars (US$4.5 million) into a local business or approved managed funds. So far, the program has attracted 601 applicants, of which 91% were Chinese nationals. In recent years, cash-strapped southern European economies, including Portugal, Spain, Greece and Cyprus, have allowed investors a residency permit for buying as little as €250,000 ($340,950) of real estate.
The Canadian immigration program that is being scrapped “significantly undervalued Canadian” permanent residency, the government said, because immigrants who used the program paid less tax and earned less in wages in Canada than those who enter the country in other ways.
Mr. Alexander said the program was also open to fraud, with applicants achieving residency but staying in their own country.
“It just wasn’t working,” he said.
Politicians from the opposition New Democratic Party have accused Prime MinisterStephen Harper
‘s Conservative Party of tilting policy back to benefit European nationalities such as the British and French, whose immigrants once predominated. The government has scoffed at the suggestion, saying Asians and Middle Easterners still make up the majority of newcomers.
About bambooinnovator
