Canada will no longer be selling green cards in return for interest free loans, after a media report indicating that the country’s investor visa program had become an express lane for wealthy Chinese hoping to secure overseas residency was quickly followed by the program’s cancellation. The Ottawa government announced on Wednesday that the country’s Immigrant Investor Program, which allowed foreign nationals to gain Canadian residency by loaning 800,000 Canadian dollars (US$726,720) interest free to any of the country’s provinces for five-years was being cancelled with all pending cases being rejected.
Public perception that the program had become a visa expressway for wealthy mainland Chinese was reinforced after a report in Hong Kong’s South China Morning Post revealed that among the 59,000 applications pending for the program, more than 45,000 were from mainland Chinese. Data from some Canadian provinces indicated that about 99 per cent of applicants are mainland Chinese. The announcement ending the investor visa program came within one week of the story being published in the Hong Kong media.
New applications for the visa category had been frozen since 2012 in an attempt to clear the existing backlog of cases. Canada’s Program Among the Most Popular with Applicants The case-load for Chinese applicants to Canada’s program amounted to approximately six times the combined applications from all other nationalities to the investor visa programs in the US, Britain and Australia.
Canada’s program was considerably more liberal than that found in many other developed countries, which normally require investments rather than loans. In the US, investor visas require a minimum US$1,000,000 investment, except in the case of high priority investments qualifying under the EB-5 visa program, which require a $500,000 investment. Undervaluing Canadian Residency.
While the media report appears to have been the catalyst for Canada to cancel the visas for loans program, the investor visa scheme had clearly been unpopular with many Canadians. Studies had shown that residents admitted through the investor visa program reported investment income and employment below the national average and paid significantly lower taxes than those in other immigrant categories. In ending the program, the Ottawa government said that the investor visa scheme “significantly undervalued Canadian” permanent residency.
The impact that the investor visa program had on the property market in some areas, particularly Vancouver, had also caused resentment among locals. Since the visa program was introduced home prices in Vancouver, where 80 per cent of Chinese investor migrants seek to live, have become the second-least affordable in the world behind Hong Kong. Now run-down bungalows in Vancouver are said to sell for as much as US$1.8 million in a city where median family income averages $64,000.
What’s Next for Canada?
According to the Canadian government, the decision to end the investor visa program is part of an effort to ensure that new residents of the country are a better fit for its economy and society. When the existing scheme was cancelled, authorities indicated that it will be replaced by a pair of pilot projects: an immigrant investor venture capital fund and a business skills program.
The new programs will place greater emphasis on an immigrant’s fluency in the nation’s two official languages and also consider how closely an applicant’s’ qualifications match the needs of Canada’s economy.
For the tens of thousands millionaires looking for a new home, perhaps they can find a home in someplace warmer than Canada. The Caribbean nation of St Kitts-Nevis now offers passports that allow for visa-free travel to Europe, the UK and most of the British Commo nwealth for only a $400,000 investment. No word yet on language requirements in the island nation.