The federal Canada Immigrant Investor Program remains controversial among supporters and critics despite it being four years since it was terminated.
Supporters say the lack of a viable federal investment program means Canada is failing to capitalize on a growing sector of the immigration landscape.
Critics hold the CIIP as a symbol of bad policy compounded by poor implementation that devalued Canadian citizenship and wreaked havoc with real estate markets in Vancouver and Toronto.
Supporters say the lack of a viable federal investment program means Canada is failing to capitalize on a growing sector of the immigration landscape.
The federal government needs to look no further than the Quebec Immigrant Investor Program for how a well-managed passive immigrant investor program can thrive.
How Did the CIIP Work?
- Applicants with a net worth of at least $1.6 million made a refundable deposit of $800,000 to the government for a period of five years with no interest paid.
- The government retained earned interest on the deposit through the period.
- The applicant, in return, received permanent residency.
- The provinces received a pro-rated share of the interest.
The Negatives
The federal program was shut down due to lack of integration of investment immigrants and its alleged limited economic benefit which the former immigration Minister advocated.
Countries with passive investment immigration programs often battle with an inflated real estate market.
In Canada, more than half of successful applicants typically settle in British Columbia, especially the city of Vancouver.
Economists believe the Vancouver real estate market is yet to fully recover from the damage caused by the CIIP.
Meanwhile, critics say the QIIP is used as a backdoor for wealthy immigrants to move to other provinces.
As of 2016, Montreal was ranked sixth in the list of cities with most applicants under the QIIP.
Most applicants move to Toronto or Vancouver at the earliest possible opportunity.
The Positives
There is enough data to suggest there were many benefits to the CIIP.
A 2015 analysis of the QIIP shows the province gains about $40,000 per settled investor, once all metrics are factored.
The program also resulted in the creation of 43,000 jobs between 2001 and 2015.
Research shows a federal program may have helped create nearly 11,000 full-time jobs between 2007 and 2011.
Further, a well-managed program that brings in the right set of wealthy immigrants will assuredly boost consumption demand.
Additionally, the human capital benefits of a wealthy immigrant’s children are a significant plus.
A 2010 study indicates each family spends around $750,000 towards investments, homes, goods, and other services.
The Big Question: Revive or Not?
The success of the QIIP shows a revamped CIIP deserves further consideration.
Clearly, there were problems with the previous federal program, but there is no reason they cannot be addressed.
The federal government should consider numerous changes and improvements drawn from many successful international residence-through-investment programs, to ensure the CIIP offers a wider range of sustainable benefits for Canada.