A federal budget can work like a fine-toothed comb. This one has succeeded in teasing out and doing away with one of the most outdated and irrational of Canadian immigration policies: the immigrant investor program.
Founded in 1986, the “cash for citizenship” program had been primarily used by Chinese immigrants – from Hong Kong, Taiwan and mainland China – to gain a foothold in Canada. Wealthy foreigners, willing to “invest” a small amount of money, were rewarded with the prize of permanent residency, and eventually, citizenship.
The program’s original intention was to leverage foreign wealth to create Canadian jobs. The trouble is, it didn’t. All immigrants in this class had to do was lend $800,000 to a provincial government, interest-free, for five years. After five years, the money was returned.
In theory, the funds could have been invested productively. In reality, many provinces would simply bank the cash. In those cases, the funds collected were not an investment in anything permanent.
Then there was the amount itself. Canadian citizenship is a prize for millions of people around the world. Yet it was being sold for the cost of five years of forgone interest on $800,000 – that’s effectively as little as $100,000, at current interest rates.
Since its inception, more than 130,000 people successfully applied for the immigrant investor program. What does Canada have to show for it? Not much. It seems to have assisted wealthy business people to buy property or set up their families in Canada. But too many of the investors had little real connection to this country, and neither did their money.
This relic should have been shuttered long ago. Its replacements – two pilot projects, consisting of an immigrant investor venture capital fund and a business skills program – could prove better. They certainly couldn’t be worse.