45,000 Chinese millionaires left hanging as Canada ends wealth-based immigration scheme
Ottawa poised to close a visa programme that has flooded Vancouver with money. Is this good or bad for BC?
Millionaires have been dropping from the sky
The way we talk about real estate in Vancouver is about to change. Ian Young, a correspondent for the South China Morning Post who runs the Hongcouver blog, hit every hot-button Vancouver has with this headline: "Vancouver facing an influx of 45,000 more rich Chinese".
This isn't a MAC Marketing Systems stunt: Young worked with actual government data. Just as your rage-kettle was reaching starting to whistle, the Tory Government moved to end the Immigrant Investor Programme as part of the 2014 budget.
Young, an ethnic-Chinese Australian, has been examining the effect of the Immigrant Investor Programme (IIP) on migration to Vancouver, combing through heaps of Immigration Department data to come up with what is not only a sinophobe's worst nightmare, but also a glimpse at how a sustained deluge of overseas money has affected the real estate market.
Shortly after Young's article hit the web, Finance Minister Jim Flaherty announced the 2014 budget. There on page 81 is the death of the Immigrant Investor Programme:
Cash for visas
The Immigrant Investor Programme is basically a cash-for-visas deal. If you have more than $1.6 million, then you loan Ottawa $800,000. interest-free for five years. In return, you and your family get resident visas; and you can later apply for Canadian citizenship. An immigrant must live in Canada for three out of the four years prior to requesting that maple-leaf passport, though. Some immigrants think that’s too long a wait, while Conservative ministers don’t think it’s long enough.
The Federal Investor Programme was wildly popular, to the extent that the approval queue was frozen in 2012 due to a massive backlog. This was caused by a huge number of mainland-Chinese millionaires flooding the Hong Kong-based application system.
Citizenship and Immigration Canada (CIC), which processes these applications, does not throttle Immigrant Investor Programme applications based on destination: If you want to move to Vancouver, your paperwork moves just as quickly/slowly as if you had wanted to move to Salmon Arm or Moose Factory.
The choice of Vancouver is pretty obvious: Who would want to move halfway around the world for an Edmonton winter? Besides, we're on the Pacific Rim, so visits home are a lot easier. Since we see that relatively few of these millionaire migrants (how is this not yet a reality show?) don't need to punch a clock, they may as well choose the prettiest city.
IIP scheduled for termination
The queue for those Immigrant Investor Programme visas is years-long, and those stuck in it are in for a crushing disappointment.
Those whose IIP applications have not already been processed by the time the Immigrant Investor Programme ends will have to re-apply under a different type of visa, such as the Startup Visa Programme or the Canadian Experience Class, which fast-tracks residency requests for people who have already lived and worked in Canada.
Neither option will help most of the IIP hopefuls, though: In fielding a volley of questions on Twitter regarding his SCMP articles, Young mentioned that only 16% of investor migrants pursue business ventures in Canada, while 40% conduct business overseas. 40% of these newcomers are either retired or unemployed.
The argument for scrapping the IIP is that the money held in exchange for those visas hasn’t proven worthwhile. Young found that many of the IIP immigrants don’t end up living in Canada permanently anyway.
However, a Analysis Group report from March 2010 had argued the opposite, urging Ottawa to let even more millionaires in (pdf).
Canada’s IIP is the most popular in the world, possibly because it’s so relatively easy to qualify for: $1.6 million won’t buy you much in Vancouver, after all. Young quotes immigration lawyer Richard Kurland, which whom he has worked on the SCMP series, as saying, "The scheme has not been handled properly. The programme is dramatically underpriced." The text of the budget echoed this sentiment: “For decades, [the IIP] has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require."