Recent changes to the Quebec Immigration Investor Program have led to a drastic fall in the popularity of one of the world’s oldest investment immigration programs. Wealthy Chinese investors, who constituted a significant component of applicants, now prefer other cheaper and less onerous programs than the Quebec residency program. In the past, thousands of high net worth Chinese nationals opted for residency permits through Quebec with the vast majority availing a legal loophole under Canada’s Charter to enjoy residence in other destinations in Canada.
The Quebec Immigrant Investor program with a quota of 1750 applications in 2014 included 1200 for China. According to sources, the quota has remained unfilled by a significant margin due to the introduction of restrictive changes to the program. The quota remained unfilled despite the fact that the deadline for submission of applications was extended three times before finally closing on March 20, 2015. When applicants were first invited in September 2014, the deadline for submission of applications was very short. When program quotas were not reached, the deadline was then extended by more than two months.
The impact of recent changes can be assessed by the fact that the program received 5,389 applications including 4676 applicants from China in a span of just two weeks in 2013 when rules were less onerous and application fees much lower. In 2012, the annual limit of 2700 applications was reached in less than 30 days.
Further, during a reference period 2008-2012 Quebec approved more applications than the combined totals from all other provinces in Canada. Québec issued permanent residence certificates to 27,498 applicants during the period, compared to 24,555 approvals issued by the Federal Immigrant Investor Program. By way of comparison, the United States approves up to 10,000 EB-5 applications annually.
The province of Québec administers an independent immigration program under the Canada-Québec Accord that governs the shared jurisdiction of immigration between Canada and the provinces including this French-speaking province. This explains why the Québec Investor Immigration Program ran parallel to the Federal program. Both schemes required applicants with a minimum net worth of $1.6 million to invest by way of a non interest bearing loan of $800,000 to the government for a period of five years. The Canadian program was terminated in 2014. The Québec program continues to operate and until recently remained very popular among high net worth applicants from China.
The significant reduction in demand for this program is being blamed on a new Quebec policy that imposes a more rigorous assessment process and more stringent documentation.
According to immigration stakeholders major concerns with the new requirements under the program include a 15-page list of documents and extensive historical verification of personal and corporate evidentiary documentation. This is deterring many individuals from applying.
While high net worth Chinese investors continue to remain interested in obtaining residence in Québec, the quality of applicants that the program demands may be difficult to reach at current quotas. The general perception amongst industry experts is that Québec has raised the bar far too high and this will lead to a decline in the pool of potential applicants.
This can be further evidenced by the fact that the 2015 application subscription window is set to operate from August 31, 2015 to January 31, 2016.
Historically, federal data has shown that close to 90% of all applicants under Québec’s program ended up residing in other parts of the country with 60% residing in British Columbia. This occurs because Canada’s Charter permits mobility which has become a subject of continued controversy with Québec enjoying the capital received from IIP loans and federal government immigration settlement subsidies without the province having to bear the cost of sustaining and maintaining the immigrant population.
Data indicates that around 25,000 investor immigrants from Québec settled in British Columbia over a period of eight years between 2004 and 2012. This represents more than half of all the investor migrants received by Vancouver, which has always been a popular destination for high net worth immigrants to Canada. The impact of such settlement demographics is evident from the fact that Vancouver has among the most expensive real estate in the world after Hong Kong. The average price of a detached house in the city is around $1.4 million.
Financing companies that readily provided financial assistance to investor migrants are now approaching immigration firms for non-Chinese references to help fill the 2015 quota.
Interestingly, the increase in processing fees during the past few years and recently raised by 50% to $15,000 has further contributed to a Quebec program that has become less attractive in comparison to other comparable residence through investment options. Considering the intense competition between developed nations to attract investor capital, the recent changes introduced by Québec may further harm its image in this dynamic market place.
Source: scmp.com