Ottawa about to relaunch multi-millionaire visa program

posted on December 4, 2014

By Peter O’Neil, Vancouver Sun | Link to Article

By Peter O’Neil, Vancouver Sun | Link to Article

OTTAWA — The Harper government is expected to unveil soon Canada’s latest attempt to attract multimillionaire investors who have historically had a mixed track record in meeting the public’s expectations — especially in B.C. — after entering the country under so-called cash-for-visa programs.

Canada’s two previous attempts, starting in the late 1980s, were flops, according to critical assessments in recently-released internal documents.

The first program led to a number of scams that cost many foreigners their entire investment, according to briefing notes released under the Access to Information Act. The second, designed to avoid risky investment schemes, failed to produce significant economic benefits for Canada, the documents say.

Both programs triggered resentment in cities like Vancouver where soaring housing costs have been blamed on the deep pockets and aggressive bidding of thousands of super-rich newcomers, including those who have exploited a loophole by entering Canada through Quebec’s separate investor program but never set foot in that province.

The Harper government, which stopped accepting new immigrant investor applications in 2012 and shut down the program earlier this year, has signalled its plans to create a pilot project program to make it both pricier and financially riskier for those who are prepared to part with a portion of their considerable wealth in exchange for permanent residence status in Canada.

Media reports have indicated that the minimum investment will be in range of $1 million to $2 million, with investors required to put money into a venture capital mutual fund. The old cash-for-visa program, killed in the 2014 budget, required investors to place just $800,000 in a five-year, guaranteed interest-free loan, with the money available for use by provincial governments for job-creation measures.

The program provided marginal benefits to governments — the net gain was the difference between an interest-free loan provided to government under the program and the cost of the province can borrowing on open markets at a time when rates are at historic lows.

Officials won’t confirm any details about the program or even reveal when the policy will be unveiled.

“The policy is still in development. We’ll have more to say when we’re ready to announce,” said a spokeswoman for Immigration Minister Chris Alexander.

Will Canada finally get the policy right? Documents analyzing past failures noted that Canada’s original investor program, launched in the 1980s, led to widespread abuse that resulted in the federal government being named in lawsuits launched by aggrieved investors.

Its 1999 replacement, designed to avoid undue risk for investors, ended up going too far the other way.

One 2013 presentation to Alexander and his top officials included a sarcastic and decidedly unbureaucratic headline: “Canada: An International Bargain for the Rich.”

The document noted that Canada’s modest $800,000 requirement sends “the unintentional but implicit (message that) Canada is less attractive and expects less from its investors.”

It noted that Canada charged less than Australia, New Zealand and the United Kingdom, yet was the only country that offered immediate permanent residency status while Canada’s competitors required successful applicants to wait for between two and five years to get residency status.

Vancouver-based lawyer Richard Kurland said the minimum should be at least $2 million, and the minister should have the discretion to increase that figure if demand is high.

The number of new millionaires being churned out by China’s booming economy is ensuring a continuous supply of high-quality applicants, allowing Canada to set the terms, according to Kurland.

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