Ending the Immigrant Investor program was a missed opportunity

posted on February 28, 2014

By Sergio Marchi, the Globe and Mail | Link to Article

By Sergio Marchi, the Globe and Mail | Link to Article

One of the items in the recent federal budget that little attention was the termination of the 25-year-old Immigration Investor Program (IIP). It was the flagship immigration tool that specifically focused on attracting global entrepreneurs and investors to Canada.

The program was “suspended” some two years ago for study. I, like many, was hoping for the program’s resurrection as a more effective and strengthened version. Instead, the budget announced its obituary.

This decision is a missed opportunity, a view that should not be seen as partisan concern. After all, the IIP was established by the Brian Mulroney Conservative government. The Liberals under Jean Chrétien – where I served as minister of citizenship and immigration – developed the program further.

No, my regret is about squandering our leadership in this sector.

We were the very first country to establish such a program. More than 20 countries have since copied and adopted our model, and the list will continue to grow, as economic growth is a priority issue for all governments and the labor market continues to be increasingly mobile. Just when this concept is really taking off globally, and when demand has never been higher, our government abandons this policy ground. Why give up on competing for investors who can add to our economic vitality?

It is not as if our intake of immigrants is being overwhelmed by the investor class. At best, the number of investors only represents 2-3 per cent of the roughly 250,000 immigrants that enter our country each year.

Apparently, the government’s rationale was about ending ‘abuse’. If there were shortcomings, it is incumbent to fix the problems and tighten the criteria. Absolutely no disagreements here. But why throw the baby out with the bath water? Moreover, if ending programs is the way to address ‘abuse’, then how many federal programs would have to be axed?

If the government had concerns, then it should have consulted extensively, in an effort to address these problem areas, and seek out better ideas and practices. But there was no meaningful dialogue. The government failed to recognize that in developing sound public policy, how you do it is as important as what you do.

I fully admit that the IIP was not perfect (what program is?). But if the government thought the investment amount was too low, then it could have proposed an increase. Most stakeholders were actually anticipating and supportive of a higher threshold. Indeed, Canada would be worth every extra penny. In addition, if they thought that residency was being undervalued, then deepen the commitments.

If they wanted the program to deliver additional economic heft, then introduce innovations to target new national or regional economic priorities.

Rather than refocusing and reinvigorating the program, it was turfed, all without providing any economic analysis. Did the ministers of finance and immigration, for example, examine and quantify the impact of the collective investments; or tabulate the additional consumer expenditures that these HNW individuals made; or the contributions that their children are making to our nation? In the budget document, Finance Minister Jim Flaherty took less than one page to explain his decision, with reasoning that was rather weak and speculative.

And to add insult to injury, the budget purports to replace the IIP with an undefined “pilot” project. Talk about ending with a ‘bang’ and restarting with a ‘whimper’.

The truth is that the Harper government, for whatever reasons, was never comfortable with this program. Perhaps they found it easier to pit a few well-to-do immigrant investors with a ‘jumping the line’ argument, against the many more modest independent or family class immigrants. They don’t worry about other provinces now aiming for Quebec, which was allowed to continue its unique investor program. And when you examine the new Citizenship Bill, the government clearly devalues the standing of Canadians living abroad – some three million strong – and thus pits them against fellow citizens living at home.

Perhaps we should not be too surprised. Wedge, populist politics has been a main staple of the Harper school of governance, but it is a divisive and unhealthy way of running a country.

Trying to attract global investors and talent is a highly competitive game, and Canada needs to play in the big leagues. This budget decision should have been about enhancing economics and not advancing Tea Party politics. Pity.

Sergio Marchi was minister of citizenship and immigration in the Jean Chrétien government.

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