BY Tara Carman, VANCOUVER SUN | Link to Article
The B.C. government will lose a $400-million loan fund, used to help replace schools and expand hospitals, as a result of Ottawa’s decision to scrap the immigrant investor program.
BY Tara Carman, VANCOUVER SUN | Link to Article
The B.C. government will lose a $400-million loan fund, used to help replace schools and expand hospitals, as a result of Ottawa’s decision to scrap the immigrant investor program.
Under the program, investor immigrants with a net worth of at least $1.6 million lend Canada $800,000 for five years in exchange for permanent residence. The province gets to use the money for five years and it is then returned, interest-free, to the immigrant.
In B.C., that money goes into the provincially owned B.C. Immigrant Investment Fund. As of January 2013, the fund was managing $403 million, according to the 2013-14 service plan.
Since 2007, the fund has lent $403 million for the development of 21 infrastructure projects by the provincial government, generating more than 2,500 jobs. Some of the projects include: $60 million lent to aid construction of BCIT’s Aerospace Technology Campus in Richmond, $5 million toward the Technology Enterprise Facility at the University of Victoria, which houses the Centre for Addictions Research B.C. and the NEPTUNE Canada underwater ocean observatory, and $13.9 million toward construction of a student residence at the University of the Fraser Valley’s Abbotsford campus.
B.C.’s international trade minister, Teresa Wat, could not say Thursday what the loss of the money will mean for the B.C. government, whether Victoria will have to cut back on infrastructure loans, and what other sources of funding might be available to fill the gap.
In an emailed statement Thursday, she said “ministry staff are looking into the specifics of the announcement, and the implications it will have on B.C. … Until we have carefully assessed the implications, it would be premature for me to comment further.”
The fund’s service plan, revised in June 2013, suggests the province had no indication the program was about to be scrapped by Ottawa and expected it to generate even more money in the coming years.
“As the program’s popularity continues and more immigrants participate at higher deposit levels, the total funds available (and thus BCIIF’s allocation) are expected to increase,” the service plan states.
Between 2009 and 2013, the provincial government also used the fund to effectively loan itself $265 million to finance construction and renovations of schools and hospitals throughout B.C.
The province also uses money from the immigrant program to provide venture capital. Access to venture capital is often cited as an issue for B.C.’s high-tech sector.
The purpose of the provincial money was to attract successful venture capital managers to B.C. to help develop innovative technology companies in the province.
The fund committed $90 million with eight fund managers who invest directly into high-tech B.C. businesses, according to the service plan.
Under Treasury Board rules, fund managers must raise a minimum of $80 million from other investors before receiving anything from the government.
Since late 2007, fund managers and their partners have invested $178 million into 20 B.C.-based companies, 17 of which are still in existence. The companies, all based in Metro Vancouver, are involved in renewable energy, information technology, life sciences or digital media.
tcarman@vancouversun.com
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