Canada toughens its Immigrant Investor Program: will a counterintuitive strategy succeed?
By Stephen Fogarty • July 14, 2010
Using counterintuitive thinking
Sometimes in life better results can be achieved by using counterintuitive thinking.
For example, when playing violin, by accident I may bow on a second string in addition to the string intended. So instead of playing F# on the D string, my bow ends up touching (and playing) the G string at the same time, resulting in the wrong note.
To improve my accuracy, Elizabeth Adams, my violin teacher at the McGill Conservatory, suggested I begin my practice sessions playing double stops—two strings at the same time—controlling my bow to ensure I avoid playing only one string while doing so. Then, she said, practice the pieces I am working on and it will be easier to hit the (single) notes I am supposed to be playing.
I have been following this recommendation for about two weeks now and my bow strokes are definitely becoming more accurate. Who would have thought that you should practice what you are supposed to be avoiding (playing two strings at once) to get better at playing one string?
Counterintuitive thinking seems to be behind new, important changes to Canada’s federal Immigrant Investor Program.
Changes to Canada’s Investor Program
As announced by the Minister of Citizenship and Immigration, the Honourable Jason Kenney, “Under these proposed changes those applying as Investors would need to have a personal net worth of $1.6 million, which is double the current level of $800,000 and these applicants would also have to double the investment they bring to Canada from the current $400,000 to $800,000.”
Will this change improve the success of Canada’s program? We have to wonder. For example, if you were considering purchasing a particular vehicle, and overnight the dealer doubled its price, would you go back and order this same automobile?
Minister Kenney obviously thinks so, considering the Canadian product. He believes that Canada’s Immigrant Investor Program has been underpriced in the world marketplace. Mr. Kenney argues that Canada had no shortage of applicants under the old rules. The investment required under Canada’s program was significantly lower than those under programs offered by the U.S.A. and the U.K., for example. These changes will only bring Canada’s qualification rules in line with those of other countries, he says.
Choosing Canada: a smart decision
The big advantage of the Canadian Immigrant Investor Program, points out the Minister, is that the candidate obtains Permanent Residency for the Investor as well as his or her dependent family members immediately upon acceptance. This compares very favourably with other countries whose Investor programs do not offer permanent status or, if they do so, only after certain conditions have been fulfilled over long delays.
Thus Mr. Kenney feels confident that Canada will remain a desirable choice for Investors since, as he says, “we’re offering the best product, if you will, in the world.”
We must concur that Canada is surely a great immigration destination. In many respects, Canada is the star of the G20 nations. Just a few days ago, it was announced that our national unemployment rate has dipped to 7.9%, while in the month of June 2010 alone, 93,000 new jobs were created. (See our recent Tweet.)
Canada’s deficit—even with government stimulus expenditures—is under control, and the Canadian banking system is very solid, in fact ranked #1 worldwide by institutes such as the World Economic Forum.
Reality of the international marketplace
This is great news, but has the Canadian Immigration Minister misread the international marketplace? Obviously, potential applicants under the Immigrant Investor Program are coming from outside Canada. And contrasted with Canada, many other countries continue to have economic woes. There are numerous businesspersons worldwide who lost much of their net worth through the market downturn. Businesspersons everywhere seem reluctant to open their wallets to hire or commit to major projects, despite heavy stimulus spending by many governments.
Given this apparent lack of cash, will these same persons be willing to commit to a five-year, non-interest yielding investment of $ 800,000.00 in exchange for Canadian permanent residency? (Or to pay the approximately $ 220,000.00 required to finance a loan for $ 800,000.00, if they choose not deposit the actual $ 800 K.)
With this current business reality, one would think it will be less likely for Canada to attract Investor candidates under the new, tougher rules. It might seem to make more sense to consider easing the qualification rules for a period of time, or at least not to increase them until the world is clearly out of this recession.
The next steps
Only time will tell if the Minister is correct despite his apparently counterintuitive approach to selling Canada’s Immigrant Investor Program in the world marketplace. My feeling is that this bold move will pay off. Once past the first year of implementation, the new rules will end up attracting more desirable candidates than ever before. We will keep you posted on developments.
While the changes are being fine tuned, Canadian embassies are not accepting new Investor applications.
However, the Province of Quebec, which has the power to select immigrants destined for that province, is continuing to accept Investor applications under the old rules. Quebec will likely change its own Investor program to mirror the federal changes at an as yet unannounced date later this year.
Of course, you are welcome to contact Fogarty Law Firm for further details on any of these issues.