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The Globe and Mail

Manitoba probes immigrant-investor program

Jack Yang and Rosemary Lu, who immigrated from China to Canada photographed at their restaurant Fleur de Lis on Coxwell St., Toronto.

Fernando Morales/The Globe and Mail/Fernando Morales/The Globe and Mail

Manitoba's auditor-general is reviewing an initiative designed to bring immigrant investors to the province in light of scandals plaguing similar programs in the Maritimes.

There has been no suggestion of wrongdoing in Manitoba; but scathing audits, fraud allegations, lawsuits and RCMP investigations in the Atlantic provinces have raised concerns thousands of kilometres away.

"It was an area we thought there was a high risk that there could be problems," said Manitoba Auditor-General Carol Bellringer in an interview with The Globe and Mail. "We wanted to find out how that whole investment part worked, and if there was any potential for [immigrants]to be taken advantage of."

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Ms. Bellringer said the audit can delve into any aspect of the program's administration – from financial and human-resources management to its information system. "It all depends once we're into the details of it, which areas are of highest risk," she said. "We start the audit with a blank page."

The investor stream is part of a broader provincial nominee program that allows provinces to hand-pick immigrants, usually through direct employer sponsorships or, as in this case, by inviting people to inject tens or hundreds of thousands of dollars into the local economy for the privilege of permanent residency.

This is supposed to be the new face of Canadian immigration – a localized, market-responsive alternative to the traditional point system of selecting skilled newcomers. The latter has become notorious for supplying the country with legions of taxi-driving engineers while employers in other regions and sectors grapple with labour shortages.

Immigration Minister Jason Kenney has credited the provincial nominee program with better matching immigrants to employers. He argues it has also injected needed growth and diversity into rural corners of the country whose populations had been declining.

Nowhere is this more true than in Manitoba, which has become the poster child for successful provincially driven immigration. It has attracted by far the most newcomers – more than 12,000 of the 36,000 nominees nationally in 2010. In addition to the thousands of skilled workers sponsored annually, says Enterpreneurship, Training and Trade Minister Peter Bjornson, "we've got a waiting list of people who want to come and invest in Manitoba."

Manitoba is banking on its record of success to persuade Mr. Kenney to give the province more leeway in how many people it is allowed to bring in.

"We feel there's a bit of a tight leash right now. … We think that's quite restrictive.We would like to see that change," Mr. Bjornson said. "We have a great example of how the program can work well."

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But Mr. Kenney says he's considering moving in the opposite direction.

"We do have some concerns with the program," he said in an interview. "We are not going to continue with the rate of growth in the program over the past few years until we're able to sit down with the provinces and make sure our concerns are addressed," he said.

His department is conducting what he calls a "major study" of the program in the wake of a series of scandals in Prince Edward Island, Nova Scotia and New Brunswick. That report, originally due this fall, is supposed to come out in "early 2012," according to a spokeswoman for Mr. Kenney.

In all three provinces, audits found the programs' goals were poorly defined. Where they were defined, they weren't measured, and what could be measured fell short or failed to comply with the provinces' own rules – especially in their investor-specific streams.

PEI's nominee program fast-tracked thousands of immigrant investors after the federal government announced plans to suspend that stream. Nova Scotia settled a class-action suit in September. Some Chinese immigrants who came to New Brunswick have also filed lawsuits, claiming they invested in bogus schemes. Many more have simply moved to Vancouver, Toronto or Montreal.

"The real focus was on the head count," says Kurt Peacock, immigration project officer with Enterprise Saint John. "They wanted to bring more immigrants each and every quarter, and there wasn't as much attention paid to how those newcomers that have already arrived are faring."

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Mr. Kenney puts it more bluntly.

"Passive investor streams are problematic. There's a lot of money that moves around, you get promoters and agents involved," he said. "Where this program works best, in my view, is where it's based on an arranged employment offer for a skilled trades person."

Ms. Bellringer's attention was piqued when her Nova Scotia counterpart came to her office seeking help with forensic investigations into the province's nominee program.

"We thought, 'Wow, that sounds pretty serious. … We'd better make sure there isn't a problem here,'" Ms. Bellringer said.

Rosemary Lu and Jack Yang were among New Brunswick's first immigrant investor s when they arrived in Saint John with nine-year-old twins in 2006. But their business partnership soured. She spent years waitressing and teaching English; he installed windows for a contracting company.

They got fed up, launched a lawsuit and moved to Toronto. Their new restaurant, Fleur de Lys, has been open since June.

"We couldn't keep going," Ms. Lu said. "It's a good idea … if you don't get taken advantage of."

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